Pinnacle shares jump on Motorola deal

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SCHAUMBURG, Ill. (CBS.MW) -- Shares of Pinnacle Holdings climbed 25 percent Wednesday after the company said it's buying Motorola's antenna business, prompting one analyst to set a $34 price target for shares that were selling under $20.

Pinnacle said it would pay $255 million in the transaction, which is expected to close in the third quarter.

The deal includes about 1,850 wireless communications sites throughout the United States and Canada along with other assets and operations of Motorola's business.

Shares of the Sarasota, Fla.-based company jumped 4 7/8 to 24 1/2.

While raising his target, Deutsche Banc Alex. Brown analyst Douglas Mitchelson also reiterated his "buy" on the provider of wireless communication tower space. He said the deal brings Pinnacle's total of owned towers to 1,550, with 1,400 managed and leased sites.

Other views

"Pinnacle has the systems and operational capacity to quickly integrate these sites into our existing network. Motorola's towers will enhance a number of our existing tower clusters and enable us to better serve a broader range of our customers' needs," Pinnacle's chief executive officer, Bob Wolsey, said in a press release.

"Motorola is just looking to see if somebody else can take care of a part of their business more efficiently than they can. It may make sense for them to outsource some of that and redeploy capital to other areas that might have a higher return," said Bob Wilkes, telecommunications analyst at Brown Brothers Harriman & Co.

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